Sunny Ways: Building Solar Infrastructure

Code:
G16-P001
Party Unit:
Members of the Party
Proposal Type:
Policy
Resolution Status:
Drafted
Resolution Timing:
In Advance
Submission Date:
Sunday, May 15, 2016
Submitter Name:
Brian Smallshaw

Preamble

WHEREAS there is an urgent need to reduce carbon emissions to limit the damage caused by climate change, and

WHEREAS Canada made a commitment at COP21 in Paris to reduce its carbon emissions, and

WHEREAS there is a need to expand our production of electricity to meet the increased demand that will result from the decarbonization of our transportation, and

WHEREAS the cost of photovoltaic power is becoming increasingly competitive with other means of electrical power generation, therefore

Operative

BE IT RESOLVED that the Canadian government will use the Bank of Canada to establish a ten billion dollar fund for distribution to each of the provinces and territories on a per capita basis for the purpose of constructing photovoltaic power generation in each of the provinces. The funds will be distributed with the following terms:

BE IT FURTHER RESOLVED The money is to be spent over the next two years.

BE IT FURTHER RESOLVED Photovoltaic panels with greater than 75% of their manufacturing taking place in Canada will have 25% of their cost subsidized by the program.

BE IT FURTHER RESOLVED The solar installations will be owned by a crown corporation to be established in each province, and the electricity generated sold to the provinces’ electrical utilities at a price of 5 cents per kilowatt hour. Electricity not purchased by the utilities will be sold on the open market.

BE IT FURTHER RESOLVED Profits earned by each of these crown corporations will be repaid to the Bank of Canada up to the amount originally received (see below). After the full amount is paid back, earned income beyond what is necessary to maintain infrastructure will be used to further expand generating capacity.

BE IT FURTHER RESOLVED At the conclusion of the program, the cost per kilowatt-hour of the generating capacity in each of the provinces will be calculated for the purposes of allocating funds in the subsequent two-year phase of the program. The province with the most efficient production of PV electricity will be granted an extra billion dollars in the next phase of the program, and the province with the next most efficient production will be granted a half-billion dollar bonus. The remaining funds will then be distributed as previously, on a per-capita basis to each of the remaining provinces and territories.
BE IT FURTHER RESOLVED Funding for this program will come from the Bank of Canada, considered as an interest-free loan to each of the provinces.

Sponsors:
Jacquie Miller, Cathy Lenihan, Ann Eastman, Lois Eaton, Elizabeth May, Gary Gagné, Bob Mackie, Rumiko Kanesaka, Steve Abbott, Romy Tittel, Marcelle Roy, Jordan Bober, Dave Charles, Cary Ennis, Sue Earle, Joanne Montrichard, Sarah Potts, Tom Mitchell, Chris Dixon, Adam Olsen, Curt Fireston, Andrea Marx, Glenn Sollitt, Jan Slakov, Kjell Liem, Margarite Sanchez

Background

This resolution is based on the conviction that we need massive, rapid action to reduce our carbon emissions to prevent catastrophic damage from climate change, and that small-scale piecemeal efforts will not be enough to achieve what is required. Specifically, it seeks the creation of large solar photovoltaic power generation farms across Canada to replace existing carbon-intensive electrical generation, and to expand our electrical generation capacity to meet the growing demand that will come from decarbonizing our transportation fleet.

It will be asked why PV power generation only? Certainly there are many other alternative power generation technologies with great potential, but all of them either have issues that prevent their rapid deployment, or are not yet sufficiently developed to permit them to be build out on a large scale over a short time frame. Wind turbines, for example, though well developed and widely used, have siting issues that make their installation a longer-term process. Though this resolution calls for the creation of solar PV farms, it certainly doesn’t preclude other initiatives to develop and deploy other alternative energy generation systems.

The resolution includes a provision to reward purchases of Canadian-made solar panels with an extra subsidy. The hope is that this project will encourage the creation of some large manufacturing facilities for solar panels in Canada to replace fossil fuel-based industries, similar to this one in Buffalo NY:
http://www.treehugger.com/solar-technology/12-million-sq-ft-solar-gigafa...

The program calls for the creation of a crown corporation in each province to oversee the building and management of the solar farms. This approach was taken to allow for flexibility in how the projects are managed in each province; for example, in some places it may be preferred to fund local co-op energy programs, in others, rooftop solar. The creation of new crown corporations was preferred over providing funding to existing power companies in each province for several reasons: in some provinces there is more than one company operating; a project of this kind might be beyond their mandate; and it is preferred to have an entity devoted solely to this effort. (Love it). The power generated will be sold at a competitive price on the electricity market. A price of 5 cents per KWh was specified, but it need not be fixed at that and if it turns out a different price is better, this can be changed. Money earned through electricity sales will be credited against the original loan until it is paid off, after which all revenue beyond what is necessary for the maintenance and upkeep of the system will be paid into each province’s general revenue. It might be asked why not use this revenue to further expand the systems, and this option could also be explored.

It is envisaged that there will be subsequent phases to this program after the initial two-year term, and an incentive system has been built in to encourage the most efficient use of funding: provinces producing the power at the lowest cost per KWh will receive extra funding in subsequent phases of the program. Bonuses for $1 billion and $0.5 billion for the two most efficient producers have been specified in this draft for discussion purposes, but those numbers should not be considered final.

Some may ask why the Bank of Canada should be used for financing a project such as this. The payback period for a solar PV farm is likely to be quite long and were the project to be financed with a typical bond issue, the interest charges over the lifetime of the project would increase its costs substantially, possibly by as much as 50%. Given the long payback period and very low risk involved, the Bank of Canada is particularly well suited for financing this project, as it has done for others in the past. Because the Bank of Canada Act stipulates that only short-term loans to the Government of Canada are permitted, it might be preferable to have a special government bond issue that will be purchased by the Bank of Canada, adding to the approximately $90 billion in government securities that it currently holds.

Small-scale, piecemeal efforts will not be enough to forestall disaster – we need a plan to act fast and act big to decarbonize our power generation.

Code

G16-P001

Proposal Type

Policy

Submitter Name

Brian Smallshaw

Preamble

WHEREAS there is an urgent need to reduce carbon emissions to limit the damage caused by climate change, and

WHEREAS Canada made a commitment at COP21 in Paris to reduce its carbon emissions, and

WHEREAS there is a need to expand our production of electricity to meet the increased demand that will result from the decarbonization of our transportation, and

WHEREAS the cost of photovoltaic power is becoming increasingly competitive with other means of electrical power generation, therefore

Operative

BE IT RESOLVED that the Canadian government will use the Bank of Canada to establish a ten billion dollar fund for distribution to each of the provinces and territories on a per capita basis for the purpose of constructing photovoltaic power generation in each of the provinces. The funds will be distributed with the following terms:

BE IT FURTHER RESOLVED The money is to be spent over the next two years.

BE IT FURTHER RESOLVED Photovoltaic panels with greater than 75% of their manufacturing taking place in Canada will have 25% of their cost subsidized by the program.

BE IT FURTHER RESOLVED The solar installations will be owned by a crown corporation to be established in each province, and the electricity generated sold to the provinces’ electrical utilities at a price of 5 cents per kilowatt hour. Electricity not purchased by the utilities will be sold on the open market.

BE IT FURTHER RESOLVED Profits earned by each of these crown corporations will be repaid to the Bank of Canada up to the amount originally received (see below). After the full amount is paid back, earned income beyond what is necessary to maintain infrastructure will be used to further expand generating capacity.

BE IT FURTHER RESOLVED At the conclusion of the program, the cost per kilowatt-hour of the generating capacity in each of the provinces will be calculated for the purposes of allocating funds in the subsequent two-year phase of the program. The province with the most efficient production of PV electricity will be granted an extra billion dollars in the next phase of the program, and the province with the next most efficient production will be granted a half-billion dollar bonus. The remaining funds will then be distributed as previously, on a per-capita basis to each of the remaining provinces and territories.
BE IT FURTHER RESOLVED Funding for this program will come from the Bank of Canada, considered as an interest-free loan to each of the provinces.

Sponsors

Jacquie Miller, Cathy Lenihan, Ann Eastman, Lois Eaton, Elizabeth May, Gary Gagné, Bob Mackie, Rumiko Kanesaka, Steve Abbott, Romy Tittel, Marcelle Roy, Jordan Bober, Dave Charles, Cary Ennis, Sue Earle, Joanne Montrichard, Sarah Potts, Tom Mitchell, Chris Dixon, Adam Olsen, Curt Fireston, Andrea Marx, Glenn Sollitt, Jan Slakov, Kjell Liem, Margarite Sanchez

Background

This resolution is based on the conviction that we need massive, rapid action to reduce our carbon emissions to prevent catastrophic damage from climate change, and that small-scale piecemeal efforts will not be enough to achieve what is required. Specifically, it seeks the creation of large solar photovoltaic power generation farms across Canada to replace existing carbon-intensive electrical generation, and to expand our electrical generation capacity to meet the growing demand that will come from decarbonizing our transportation fleet.

It will be asked why PV power generation only? Certainly there are many other alternative power generation technologies with great potential, but all of them either have issues that prevent their rapid deployment, or are not yet sufficiently developed to permit them to be build out on a large scale over a short time frame. Wind turbines, for example, though well developed and widely used, have siting issues that make their installation a longer-term process. Though this resolution calls for the creation of solar PV farms, it certainly doesn’t preclude other initiatives to develop and deploy other alternative energy generation systems.

The resolution includes a provision to reward purchases of Canadian-made solar panels with an extra subsidy. The hope is that this project will encourage the creation of some large manufacturing facilities for solar panels in Canada to replace fossil fuel-based industries, similar to this one in Buffalo NY:
http://www.treehugger.com/solar-technology/12-million-sq-ft-solar-gigafa...

The program calls for the creation of a crown corporation in each province to oversee the building and management of the solar farms. This approach was taken to allow for flexibility in how the projects are managed in each province; for example, in some places it may be preferred to fund local co-op energy programs, in others, rooftop solar. The creation of new crown corporations was preferred over providing funding to existing power companies in each province for several reasons: in some provinces there is more than one company operating; a project of this kind might be beyond their mandate; and it is preferred to have an entity devoted solely to this effort. (Love it). The power generated will be sold at a competitive price on the electricity market. A price of 5 cents per KWh was specified, but it need not be fixed at that and if it turns out a different price is better, this can be changed. Money earned through electricity sales will be credited against the original loan until it is paid off, after which all revenue beyond what is necessary for the maintenance and upkeep of the system will be paid into each province’s general revenue. It might be asked why not use this revenue to further expand the systems, and this option could also be explored.

It is envisaged that there will be subsequent phases to this program after the initial two-year term, and an incentive system has been built in to encourage the most efficient use of funding: provinces producing the power at the lowest cost per KWh will receive extra funding in subsequent phases of the program. Bonuses for $1 billion and $0.5 billion for the two most efficient producers have been specified in this draft for discussion purposes, but those numbers should not be considered final.

Some may ask why the Bank of Canada should be used for financing a project such as this. The payback period for a solar PV farm is likely to be quite long and were the project to be financed with a typical bond issue, the interest charges over the lifetime of the project would increase its costs substantially, possibly by as much as 50%. Given the long payback period and very low risk involved, the Bank of Canada is particularly well suited for financing this project, as it has done for others in the past. Because the Bank of Canada Act stipulates that only short-term loans to the Government of Canada are permitted, it might be preferable to have a special government bond issue that will be purchased by the Bank of Canada, adding to the approximately $90 billion in government securities that it currently holds.

Small-scale, piecemeal efforts will not be enough to forestall disaster – we need a plan to act fast and act big to decarbonize our power generation.